US dollar slumps after softer inflation, China rate cut. AUD/USD hits 18 month high
The Australian dollar is at the highest levels since February 2023 as part of a broad selloff in the US dollar following softer US inflation data and China cutting lending rates.The definitive break above 0.6900 in AUD/USD cracks the June 2023 high and a series of highs in that range. It's accelerated higher since.The Australian dollar is particularly leveraged to a better Chinese economy and the market is enthusiastic this week about a series of monetary and fiscal announcements to alter China's middling trajectory. Zooming out, the weekly chart for AUD/USD is showing a breakout.On the US dollar side, the slide in inflation gives the Fed more leeway to quickly lower rates. The market is almost-evenly divided between 50 and 25 basis points for the November 7 FOMC decision. We still have two non-farm payrolls reports before that decision but it will swing based on incoming economic data and comments from policymakers.At the moment, the larger theme is China and a potential cyclical pickup in the global economy. That's generally a bad thing for the US dollar, particularly at a time when the market was pricing in higher US interest rates that G10 peers, like Australia. This article was written by Adam Button at www.forexlive.com.
The Australian dollar is at the highest levels since February 2023 as part of a broad selloff in the US dollar following softer US inflation data and China cutting lending rates.
The definitive break above 0.6900 in AUD/USD cracks the June 2023 high and a series of highs in that range. It's accelerated higher since.
The Australian dollar is particularly leveraged to a better Chinese economy and the market is enthusiastic this week about a series of monetary and fiscal announcements to alter China's middling trajectory.
Zooming out, the weekly chart for AUD/USD is showing a breakout.
On the US dollar side, the slide in inflation gives the Fed more leeway to quickly lower rates. The market is almost-evenly divided between 50 and 25 basis points for the November 7 FOMC decision. We still have two non-farm payrolls reports before that decision but it will swing based on incoming economic data and comments from policymakers.
At the moment, the larger theme is China and a potential cyclical pickup in the global economy. That's generally a bad thing for the US dollar, particularly at a time when the market was pricing in higher US interest rates that G10 peers, like Australia. This article was written by Adam Button at www.forexlive.com.
